DOCSLIB.ORG

The Effect of Lapse of Time on Suits in Equity

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Effect of Lapse of Time on Suits in Equity LAPSE OF TIME ON SUITS IN EQUITY. tions in favor of personal rights which are formulated in the Constitution and its amendments, but those limitations -would exist rather by inference and the general spirit of the Constitution from which Congress derives all its powers than by any express and direct application of its provisions." By annexation then, the territory and the inhabitants become -auintegral part of the United States, to be governed by the people of the United States as expressed by Acts of Con- gress, Congress having power to pass all acts to regulate the government of the territories, subject only to the restriction that those acts must not be in conflict with the -Constitution. PHIr.ADur.PHIA, March, 1893. "THE EFFECT OF LAPSE OF TIME ON SUITS IN EQUITY. By GEORGE WHARTON PEPPER, ESP. PERHAPS there is no branch of the law in which the -courts have allowed themselves greater latitude of expression than that branch which is occupied with determining the •effect of lapse of time upon the rights of plaintiffs who seek for equitable relief. It is obvious that radically different -considerations are applicable, on the one hand, to cases in which a trust relation subsists between plaintifi and -defendant, and, on the other hand, to cases in which there is no such relation between the parties. Again, in cases in which a trust relation does subsist, it is clear that great importance must be attached to the distinction between trusts which arise from the operation of law upon .a written instrument or from the express or tacit admission .of trusteeship by the defendant, and cases in which the trust arises purely by construction of law and in consequence ,of facts and circumstances dehors the written instrument, -and independent of any admission on the part of the defend- THE EFFECT OF LAPSE OF ant. But an examination of the cases shows that the courts have shown themselves unusually ready to indulge in universal propositions in deciding particular cases, and they have not shrunk from asserting that mere lapse of time will bar no trusts whatever, when they happened to be deciding a case involving an express trust; and they have alleged with equal positiveness, when it so happened that a constructive trust was before them for examination, that in all cases of trust the Statute of Limitations will be applied by a chancellor at the expiration of the period limited by the law. The result of all this has been to create much confusion upon a subject that is not of itself difficult to understand. It is easy to trace the effect of this confusion upon the text writers, who have in general failed to recognize what are conceived to be the true principles applicable to the deter- mination of these questions. Thus LEwiN, in his admirable work on trusts, while explicitly distinguishing between express and constructive trusts, and between cases in which laches is, and those in which it is not, imputable to the plaintiff, nevertheless fails to-observe the distinction in the discussion of particular decisions. He cites Lord ALVAN- LEfS celebrated decision in Pickering v. Lord Stamford1 in the course of which that distinguished jurist remarked: "I know of no rule that has established tlat mere length of time will bar." Then LEWIN adds: "The doctrine laid down by Lord ALVANLEY in the case referred to, that mnere length of time will not bar, requires some qualification." ' He proceeds to instance cases of suits against a trustee to. impeach a purchase, suits to set aside the purchase of a reversionary interest, suits to fix a defendant with a con- structive trust, and suits asking relief for acts of waste or on the ground of fraud. In such cases, he says, a delay of- less than twenty years may bar the plaintiffs' claim to relief. It is clear that none of these cases requires a modification of Lord ALVANLEY'S statement. They are none of them cases. 12 V sFY, Jr., 282. 2 *872. TIME ON SUITS IN EQUITY. in which there is "a mere lengik of time." They are all of them cases in which either the positive bar of the statute is applied in obedience to the rule of laW, or in which that branch of the doctrine of laches which proceeds upon the ground of equitable estoppel is always applied by the chancellor. Nor is LEWIN'S three-fold classification of the cases in which lapse of time will operate as a bar an entirely satis- factory classification. The three bars which he recognizes are (i) a statute of limitation; (2) the presumption of some- thing done, which, if done, is subversive of the plaintiff's rights ; (3) the ground of public policy or inconvenience of the relief.1 It is believed that an examination of the lucid opinion of Lord ALVANLEY, in Pickering v. Lord Stam- ford, will make it clear that there should be a four-fold divi- sion-a division which will be found to harmonize the great mass of ju.dicial decisions upon lapse of time, and .not incon- sistent with any well-considered case. This classification may be thus stated: The chancellor will deny equitable relief to the plaintiff (I) if the defendant has held adversely to the plaintiff for more than the legal statutory period; (2) if the plaintiff, by acquiescence, has given his tacit consent to acts which he now seeks to impeach; (3) if the case is one in which, owing to the lapse of time, the Court will, accord- ing to certain definite principles, presume something to have been done which, if done, would bar the suit; (4) if during the delay of the plaintiff there has been a loss of evidence, or by reason of the delay of the plaintiff the defendant or third persons have altered their position for the worse. In the first case the chancellor is said to act in obedience to the statutes of limitation.2 In the second case the chancellor proceeds upon the ground that a Court of Equity will not permit a plaintiff to obtain relief against the very transaction to which he was himself a party. In the 3*864. 2 ,, 1 think it is a mistake in point of language to say that Courts of Equity act merely by analogy to the statutes; they act in obedience to them." Lord PCDESDALE, in Hovenden v. Annesley, 2 Sch. & Lef., 63o. THE EFFECT OF LAPSE OF third case the chancellor refuses relief, not because he really believes what is presumed, but, in the absence of evidence, for the purpose of quieting the possession. "It is said,". remarks Lord IERSKINE, "you cannot firesume unless you believe. It is because there are no means of creating belief or disbelief that such general presumptions are raised."' In the fourth case-to which, and to which alone, the term laches- is applicable-the chancellor is governed by the familiar maxim '"Vigilantibusnon dormientibus aequitas subvenit." He will not assist the plaintiff, if the hardship upon the defendant is of the plaintiff's own making; in other words, the plaintiff is e4tofed. If a case cannot be reduced to one of these four categories no lapse of time, however long, will bar the plaintiff of his relief. "The mere lapse of time," said Mr. Justice STORY in Oliver v. Piatt,2 "constitutes of itself no bar to the enforcement of a subsisting trust." Before examining each of these categories in detail, it will be convenient to state the case of Pickering v. Lord Stamford. A testator gave the residue of his personal estate to a charity, and thirty-five years: after his death a bill was filed by the representative of one of his next of kin, praying that such part as consisted of money lent upon mortgage or other real security might be declared a void bequest under the statutes of mortmain which forbade testa- mentary gifts of interests in, and charges or encumbrances upon, real estate. The bill further prayed a distribution among the next of kin then living. Lord ALVANLEY approached the case from the point of view of sound com- mon sense. He expressed himself as anxious to discourage stale claims, but he admitted that mere lapse of time would not bar. "Therefore, that being the case, I am to say whether, under the circumstances, a bar can be resumed." Having directed inquiries by a master, he came to the con- clusion that no release or assignment could be presumed. Then he considered the case in the light of the doctrine of laches, or, as he was pleased to. say, the ground of incon- 'Hillary v. Waller, 12 Vessey, 266. 23 How, 411. TIME ON SUITS IN EQUITY. 323 venience. "If from the plaintiff's lying by it is impossible- for the defendants to render the accounts he calls for, or it. will subject them to great inconvenience, he must suffer; or the Court will oppose, what I think the best ground, heblic- Convenience. The plaintiffs are so conscious of this that they do not call on the trustees to account for what has been -disbursed before any demand made. It appears that the trustees, who by their conduct have done themselves. great credit, have kept such accounts that there is no diffi- culty in finding the personal estate at the death of the tes- tator. Therefore, not desiring to be understood to give any countenance to these stale demands, but upon the circum- stance that there is nothing inducing great public or private- inconvenience,'that the accounts are found, and that the- trustees are not called on to account for what has been dis-.
Load more

Recommended publications
  • Spring 2014 Melanie Leslie – Trusts and Estates – Attack Outline 1
    Spring 2014 Melanie Leslie – Trusts and Estates – Attack Outline Order of Operations (Will) • Problems with the will itself o Facts showing improper execution (signature, witnesses, statements, affidavits, etc.), other will challenges (Question call here is whether will should be admitted to probate) . Look out for disinherited people who have standing under the intestacy statute!! . Consider mechanisms to avoid will challenges (no contest, etc.) o Will challenges (AFTER you deal with problems in execution) . Capacity/undue influence/fraud o Attempts to reference external/unexecuted documents . Incorporation by reference . Facts of independent significance • Spot: Property/devise identified by a generic name – “all real property,” “all my stocks,” etc. • Problems with specific devises in the will o Ademption (no longer in estate) . Spot: Words of survivorship . Identity theory vs. UPC o Abatement (estate has insufficient assets) . Residuary general specific . Spot: Language opting out of the common law rule o Lapse . First! Is the devisee protected by the anti-lapse statute!?! . Opted out? Spot: Words of survivorship, etc. UPC vs. CL . If devise lapses (or doesn’t), careful about who it goes to • If saved, only one state goes to people in will of devisee, all others go to descendants • Careful if it is a class gift! Does not go to residuary unless whole class lapses • Other issues o Revocation – Express or implied? o Taxes – CL is pro rata, look for opt out, especially for big ticket things o Executor – Careful! Look out for undue
    [Show full text]
  • Confidential Relations and Unenforcible Express Trusts
    University of Chicago Law School Chicago Unbound Journal Articles Faculty Scholarship 1928 Confidential Relations and Unenforcible Express Trusts George Gleason Bogert Follow this and additional works at: https://chicagounbound.uchicago.edu/journal_articles Part of the Law Commons Recommended Citation George Gleason Bogert, "Confidential Relations and Unenforcible Express Trusts," 13 Cornell Law Quarterly 237 (1928). This Article is brought to you for free and open access by the Faculty Scholarship at Chicago Unbound. It has been accepted for inclusion in Journal Articles by an authorized administrator of Chicago Unbound. For more information, please contact [email protected]. CONFIDENTIAL RELATIONS AND UNEN- FORCIBLE EXPRESS TRUSTS GEORGE GLEASON BOGERT* It is a commonplace that courts of equity frequently base relief solely on the violation of a confidential relation. One of numerous examples of this action is to be found in the constructive trusts which are often created where a grantee has broken an oral, unenforcible promise to hold in trust for the grantor, and the grantee stood in a confidential relation to the grantor at the time of the making of the promise. The following is a typical case: A has conveyed land to B on B's oral agreement to hold it in trust for A and reconvey at A's command. A and B were in confidential relations before the deed was made. The Statute of Frauds prevents the enforcement of B's express promises. The retention of the land after setting up the Statute is not generally regarded as such inequitable conduct as to justify a decree that the holder is a constructive trustee.
    [Show full text]
  • The Texas Constructive Trust and Its Peculiar Requirements
    Digital Commons at St. Mary's University Faculty Articles School of Law Faculty Scholarship Spring 2018 The Texas Constructive Trust and Its Peculiar Requirements David Dittfurth St. Mary's University School of Law, [email protected] Follow this and additional works at: https://commons.stmarytx.edu/facarticles Part of the Estates and Trusts Commons Recommended Citation David Dittfurth, The Texas Constructive Trust and Its Peculiar Requirements, 50 Tex. Tech L. Rev. 447 (2018). This Article is brought to you for free and open access by the School of Law Faculty Scholarship at Digital Commons at St. Mary's University. It has been accepted for inclusion in Faculty Articles by an authorized administrator of Digital Commons at St. Mary's University. For more information, please contact [email protected]. THE TEXAS CONSTRUCTIVE TRUST AND ITS PECULIAR REQUIREMENTS David Dittfurth" I. INTRODUCTION ........................................ 447 II. THESIS .............................................. 448 III. CONSTRUCTIVE TRUST MECHANICS ........................ 451 A . JudicialR em edy ........................................................................ 451 B. Statutory Rem edies ................................................................... 452 IV. THE THREE-ELEMENT RULE ........................................................... 454 A. KCM Financial, LLC v. Bradshaw...................454 B . K insel v. L indsey ...................................................................... 458 V. THE FUNCTION OF WRONGDOING..................................................
    [Show full text]
  • Orphans' Court of Pennsylvania, Philadelphia County. Mckee Estate
    83 Pa. D. & C. 492 Page 1 3 Fiduc.Rep. 274, 83 Pa. D. & C. 492, 1953 WL 4499 (Pa.Orph.) Orphans' Court of Pennsylvania, Philadelphia County. Charities 37(1) McKee Estate 75k37(1) Most Cited Cases No. 654. Distribution of assets of a charitable trust cy pres was delayed for a five year period during which income was to April term, 1902. be applied under a scholarship plan authorized by the audit- February 6, 1953. ing judge and by which the court retains supervisory con- trols of a fund for a limited period of years "in order to per- **1 *493 Exceptions to adjudication. mit the situation to crystallize." West Headnotes Charities 37(6) Wills 618 75k37(6) Most Cited Cases 409k618 Most Cited Cases Where it is clear from a will as a whole that testator's intent The fact that no beneficiary is named to receive and enjoy is primarily charitable, a provision that the fund is to be surplus income earned by testator's residuary estate during used for the specific charitable purposes outlined and for the life of certain of his descendants does not violate any "no other purpose", does not prevent the application of the rule of law where it is clear from the will as a whole that the doctrine of cy pres, unless accompanied by restraints upon surplus income is to be accumulated for the benefit of a alienation, forfeiture or reverter clauses. charity. Charities 37(8) Charities 4 75k37(8) Most Cited Cases 75k4 Most Cited Cases Where a testator who was a Negro and military man left his A gift to charity is not rendered invalid where it vests imme- residuary estate of approximately $1,000,000 for the pur- diately upon testator's death because possession and enjoy- pose of founding and maintaining an inter-racial school for ment are postponed during the life of certain of testator's orphan boys desiring naval training, and the fund is insuffi- descendants.
    [Show full text]
  • Must the Remedy at Law Be Inadequate Before a Constructive Trust Will Be Impressed?
    St. John's Law Review Volume 25 Number 2 Volume 25, May 1951, Number 2 Article 6 Must the Remedy at Law Be Inadequate Before a Constructive Trust Will Be Impressed? St. John's Law Review Follow this and additional works at: https://scholarship.law.stjohns.edu/lawreview This Note is brought to you for free and open access by the Journals at St. John's Law Scholarship Repository. It has been accepted for inclusion in St. John's Law Review by an authorized editor of St. John's Law Scholarship Repository. For more information, please contact [email protected]. 1951] NOTES AND COMMENT ing has never been held to be in this category. The choice of program and set and the failure or success of a broadcaster has been left to the public. The approval or rejection of the Commission's decision will decide whether or not these same principles will apply to color telecasts. Whatever the decision of the court, and whichever system of color television broadcasting is finally approved, the controversy will at last have the finality of a decision of the United States Su- preme Court. There will have been a substantial contribution to a new field of law-television law. Under this law the industry will grow and perfect itself. In this way there will best be served the "public interest, convenience, or necessity." X MUST THIE REMEDY AT LAw BE INADEQUATE BEFORE A CONSTRUCTIVE TRUST WILL BE IMPRESSED? Introduction Generally speaking, a constructive trust is a trust by operation of law, which arises contrary to intention 1 against one, who by fraud, commission
    [Show full text]
  • Beware the Constructive Trust Claim
    Portfolio Media. Inc. | 860 Broadway, 6th Floor | New York, NY 10003 | www.law360.com Phone: +1 646 783 7100 | Fax: +1 646 783 7161 | [email protected] Beware The Constructive Trust Claim Law360, New York (October 13, 2010) -- Faced with the prospect of little recovery at some distant point in the future, larger unsecured creditors are using the remedy of a constructive trust to target specific property and to attempt to obtain a full recovery superior to all other claimants, including senior secured creditors. Even if lacking in merit, the mere assertion of a constructive trust claim may prove to be an impediment in getting past an objection to plan confirmation based on the demand that the unresolved constructive trust claim be separately classified. The ultimate resolution of the claimant’s entitlement to a constructive trust remedy, including the procedure to attack it, depends on the circuit in which the bankruptcy case is pending. The Basic Law as to the Remedy of a Constructive Trust “A constructive trust is an involuntary equitable trust created as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner.” In re Real Estate Associates Ltd. Partnership Litig., 223 F. Supp. 2d 1109, 1139 (C.D. Cal. 2002). “The imposition of a constructive trust requires: (1) the existence of res (property or some interest in property); (2) the right of the complaining party to that res; and (3) some wrongful acquisition or detention of the res by another party who is not entitled to it.” See Burlesci v.
    [Show full text]
  • Original 10/16/2018
    ORIGINAL 10/16/2018 IN THE SUPREME COURT OF MONTANA IN THE STATE OF MONTANA A Private for-profit governmental services Corporation STATE OF MONTANA - DUN AND BRAD #945782027 ) Case # D DST) A private registered legal business entity A subsidiary corporation of UNITED STATES Corporation A De Facto for profit Governmental Services Corporation'FILED ) OCT 1 5 vS 2018 Ed" Smith DARRIN LELPAD REI3ER dba CLERK OF THE SUPREME COURT STATE OF MONTANA An artificial entity created through fraud, and Unlawful Conversion of natural Name by the STATE OF MONTANA Unlawfully Convicted, the man being involuntarily held as surety appearing by special appearance of Darrin Leland; of family of Reber A Living Soul, A man of GOD, Bondservant of Christ, Non Personam, Sui Juris a Non-representative/Non-agent CC: US Army Provost Marshal General Notified in Writing CC: US Commerce Secretary Notified in Writing U.S.C. Title 18 242: Deprivation of Rights Under Color of Law This is a Living Testimony in form of an Affidavit; a Challenge of my Rights, Status, Standing &Jurisdiction; a Notice of Discovery of Fraud and Impropriety; a Writ of Habeas Corpus; a Demand for Remedy; and a Claim for Compensation Notice to principle is notice to agent, Notice to agent is notice to principle. I hereby pray to God for relief and command the administrator as public servant of"We the People" to read this thoroughly and with comprellension, this document is of a very serious nature and is not frivolous. Page 1 of 87 There will be no presumptions or assumptions, no Tacit agreements, no waiver of rights, no hearsay, no lawyering or attornment from the bench.
    [Show full text]
  • ELIZABETH KERR ET AL. V. LYDIA HENDERSON ET AL
    09/28/2020 IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE July 23, 2020 Session ELIZABETH KERR ET AL. v. LYDIA HENDERSON ET AL. Appeal from the Chancery Court for Johnson County No. 7226 John C. Rambo, Chancellor No. E2020-00112-COA-R3-CV In this case involving the inheritance of an investment account, the three plaintiffs filed a complaint in September 2016, asserting, inter alia, that a letter executed by their father prior to his 2007 death had operated to create an express trust concerning the account, for which their stepmother had acted as trustee with the understanding that the plaintiffs were to be the beneficiaries of the account after her death. The plaintiffs alternatively sought imposition of a constructive trust. The plaintiffs’ stepmother, who is the subject decedent in this action, had died in April 2016. The plaintiffs initially named as defendants the co- executors of the decedent’s estate, as well as the financial institution holding the investment account. The trial court subsequently entered agreed orders to dismiss the financial institution as a party and to substitute as defendants the decedent’s three adult children from a previous marriage. Upon competing motions for summary judgment and following a hearing, the trial court granted summary judgment in favor of the plaintiffs, finding that an express trust had been created by the writings of the plaintiffs’ father and that, alternatively, a constructive trust should be imposed based on the combined writings and actions of the plaintiffs’ father and the decedent. The defendants filed a motion to alter or amend the judgment, which the trial court denied following a hearing upon finding in part that new evidence submitted by the defendants should not be considered.
    [Show full text]
  • Uniform Trust Code
    D R A F T FOR DISCUSSION ONLY UNIFORM TRUST CODE NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE LAWS MARCH 10, 2000 INTERIM DRAFT UNIFORM TRUST CODE WITHOUT PREFATORY NOTE AND COMMENTS Copyright © 2000 By NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE LAWS The ideas and conclusions set forth in this draft, including the proposed statutory language and any comments or reporter’s notes, have not been passed upon by the National Conference of Commissioners on Uniform State Laws or the Drafting Committee. They do not necessarily reflect the views of the Conference and its Commissioners and the Drafting Committee and its Members and Reporters. Proposed statutory language may not be used to ascertain the intent or meaning of any promulgated final statutory proposal. UNIFORM TRUST CODE TABLE OF CONTENTS ARTICLE 1 GENERAL PROVISIONS AND DEFINITIONS SECTION 101. SHORT TITLE. ............................................................ 1 SECTION 102. SCOPE. ................................................................... 1 SECTION 103. DEFINITIONS. ............................................................. 1 SECTION 104. DEFAULT AND MANDATORY RULES. ...................................... 4 SECTION 105. QUALIFIED BENEFICIARIES. ............................................... 5 SECTION 106. NOTICE. .................................................................. 5 SECTION 107. COMMON LAW OF TRUSTS. ................................................ 6 SECTION 108. CHOICE OF LAW. .........................................................
    [Show full text]
  • Use of Declaratory Judgment Actions in Probate
    North Dakota Law Review Volume 46 Number 3 Article 2 1969 Use of Declaratory Judgment Actions in Probate Shirley A. Webster Follow this and additional works at: https://commons.und.edu/ndlr Part of the Law Commons Recommended Citation Webster, Shirley A. (1969) "Use of Declaratory Judgment Actions in Probate," North Dakota Law Review: Vol. 46 : No. 3 , Article 2. Available at: https://commons.und.edu/ndlr/vol46/iss3/2 This Article is brought to you for free and open access by the School of Law at UND Scholarly Commons. It has been accepted for inclusion in North Dakota Law Review by an authorized editor of UND Scholarly Commons. For more information, please contact [email protected]. USE OF DECLARATORY JUDGMENT, ACTIONS IN PROBATE SHIRLEY A WEBSTER* An action for a declaratory judgment is an extremely useful procedure in probate. Probate administration gives rise to complex problems involving every conceivable kind of property. The intertwined and often con- flicting rights of the distributees, heirs and creditors create uncer- tainties which can delay the closing of administration. A prompt and final determination of these problems is most desirable from the point of view of the fiduciary, his attorney, the persons interested in the estate and the general public. A fiduciary is often confronted with problems as to the inter- pretation of a will, determination of who are heirs or distributees, questions of priority of claims, title and rights to property, abate- ment of bequests and many other matters. The parties interested do not have all of the information held by the fiduciary and are not in a position to see the overall picture of the estate.
    [Show full text]
  • Its the Secret Trust? the Law
    Trust? Its the Secret Trust? The law ROMAN CANON LAW 3.3 Rights Suspension and Corruption Article 100 - Cestui Que Vie Trust Canon 2057 Any Administrator or Executor that refuses to immediately dissolve a Cestui Que (Vie) Trust, or if the man/woman wants to take control upon their Private Person establishing their status and competency, The Fiduciary is guilty of fraud and fundamental breach of their fiduciary duties requiring their immediate removal and punishment Canon 2045 By 1815 and the bankruptcy of the Crown and Bank of England by the Rothschilds, for the 1st time, the Cestui Que Vie Trusts of the United Kingdom became assets placed in private banks effectively becoming "private trusts" or "Fide Commissary Trusts" administered by commissioners (guardians). From 1835 and the Wills Act, these private trusts have been also considered "Secret Trusts" whose existence does not need to be divulged. Canon 2046 From 1917/18 with the enactment of the Sedition Act and the Trading with the Enemy Act in the United States and through the United Kingdom, the citizens of the Commonwealth and the United States became effectively "enemies of the state" and "aliens" which in turn converted the "Fide Commissary" private secret trusts to "Foreign Situs" (Private International) Trusts. Canon 2047 In 1931, the Roman Cult, also known as the Vatican created the Bank for International Settlements for the control of claimed property of associated private central banks around the world. Upon the deliberate bankruptcy of most countries, private central banks were installed as administrators and the global Cestui Que Vie/Foreign Situs Trust system was implemented from 1933 onwards.
    [Show full text]
  • Circuit Court for Frederick County Case No. C-10-CV-19-000066
    Circuit Court for Frederick County Case No. C-10-CV-19-000066 UNREPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 1658 September Term, 2019 ______________________________________ JP MORGAN CHASE BANK, N.A. v. TRUIST BANK, ET AL. ______________________________________ Fader, C.J., Nazarian, Shaw Geter, JJ. ______________________________________ Opinion by Fader, C.J. ______________________________________ Filed: December 17, 2020 *This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104. — Unreported Opinion — ______________________________________________________________________________ This appeal concerns the respective priority positions of (1) a lender who refinances a home mortgage loan secured by a first-priority deed of trust on the property, and (2) an intervening home equity lender whose line of credit is secured by a deed of trust on the same property.1 Specifically, we consider whether the refinancing lender is equitably subrogated to the original home mortgage lender’s senior priority position when, in a transaction contemporaneous with the refinancing, the intervening home equity lender’s line of credit is paid down to zero but, unbeknownst to the refinancing lender, the line is not closed and the deed of trust is never released. We hold that in such circumstances the refinancing lender is equitably subrogated to the position of the original, first-priority lender if the intervening lender maintains its original priority position, is not otherwise prejudiced, and would be unjustly enriched in the absence of subrogation.
    [Show full text]